In a significant reshuffle of the BSE Sensex, Trent and Bharat Electronics Limited (BEL) are set to join the prestigious 30-share index, replacing Nestle India and IndusInd Bank. This change will come into effect on June 20, marking a fresh alignment of India’s benchmark index with evolving market dynamics.
Strong Fund Inflows Expected for Trent and BEL
According to Nuvama Alternative & Quantitative Research, the inclusion of these two companies is expected to trigger substantial passive fund inflows.
Trent is likely to see inflows of around $330 million
BEL may receive up to $378 million
These inflows are largely attributed to the adjustment of exchange-traded funds (ETFs) and index-linked portfolios that track the Sensex.
Nestle India and IndusInd Bank Face Outflows
While two companies are set to benefit from the inclusion, the exclusion of Nestle India and IndusInd Bank could lead to sizeable outflows.
Nestle India may see outflows of about $230 million
IndusInd Bank may witness outflows of $145 million
This shift might affect their near-term stock performance, especially as index-linked funds adjust their holdings accordingly.
Historical Trends Suggest Intraday Gains for New Entrants
“Historically, Sensex inclusions tend to see intraday upmoves, supported by stronger volumes, and a similar trend could play out this time as well,” noted Nuvama’s research team.
Traders and investors often react positively to Sensex inclusions, anticipating increased demand from passive funds and retail participation.
Sector Shift Reflects Evolving Market Trends
The move reflects the evolving nature of the Indian equity market, where consumer-driven companies like Trent—a Tata Group firm focused on retail—and defence and electronics giant BEL are gaining prominence due to their strong growth and investor confidence.
This reshuffling is not just a routine index update; it also sends a signal to investors about which sectors and companies are gaining momentum in India’s economic landscape.
Market to Watch Stock Movements Closely
As the adjustment date approaches, market participants are likely to monitor stock price movements and trading volumes of all four companies closely. The changes may also impact short-term trading strategies and institutional investment flows.
Key Highlights:
Trent and BEL to enter BSE Sensex from June 20.
Nestle India and IndusInd Bank to be removed from the index.
Estimated inflows: $330M for Trent and $378M for BEL.
Estimated outflows: $230M from Nestle India and $145M from IndusInd Bank.
Historical trend suggests intraday upmoves in newly included stocks.
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